GOODWILL AND OTHER ASSETS

The changes in carrying amounts of goodwill within the Company’s DNA and DI segments are summarized as follows:



	DNA			DI			Total

Goodwill	$	112,120		$	390,847		$	502,967
Accumulated impairment losses	(13,171		)	(38,859		)	(52,030		)
Balance at January 1, 2010	$	98,949		$	351,988		$	450,937
Impairment loss	—			(168,714		)	(168,714		)
Tax benefit (note 4)	—			(3,922		)	(3,922		)
Currency translation adjustment	43			(8,946		)	(8,903		)
Goodwill	112,163			377,979			490,142
Accumulated impairment losses	(13,171		)	(207,573		)	(220,744		)
Balance at December 31, 2010	$	98,992		$	170,406		$	269,398
Currency translation adjustment	(50		)	(16,285		)	(16,335		)
Goodwill	112,113			361,694			473,807
Accumulated impairment losses	(13,171		)	(207,573		)	(220,744		)
Balance at December 31, 2011	$	98,942		$	154,121		$	253,063

The Company uses the most current information available and performs the annual impairment analysis as of November 30 each year. However, actual circumstances could differ significantly from assumptions and estimates made and could result in future goodwill impairment. The Company tests for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the carrying value of a reporting unit below its reported amount.

In 2011, the Company adopted the provisions of FASB ASU 2011-08, Testing Goodwill for Impairment (ASU 2011-08), and performed a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value (refer to note 1). In 2010 and 2009, goodwill was reviewed for impairment based on a two-step test. In the first step, the Company compares the fair value of each reporting unit with its carrying value. The fair value is determined based upon discounted estimated future cash flows as well as the market approach or guideline public company method. The Company’s Step 1 impairment test of goodwill of a reporting unit is based upon the fair value of the reporting unit, defined as the price that would be received to sell the net assets or transfer the net liabilities in an orderly transaction between market participants at the assessment date (November 30). In the event that the net carrying amount exceeds the fair value, a Step 2 test must be performed whereby the fair value of the reporting unit’s goodwill must be estimated to determine if it is less than its net carrying amount.

The techniques used in the Company's qualitative assessment, Step 1 impairment test and if necessary, Step 2 impairment test have incorporated a number of assumptions that the Company believes to be reasonable and to reflect market conditions forecast at the assessment date. Assumptions in estimating future cash flows are subject to a high degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the time a forecast is made. To this end, the Company evaluates the appropriateness of its assumptions as well as its overall forecasts by comparing projected results of upcoming years with actual results of preceding years and validating that differences therein are reasonable. Key assumptions, all of which are Level 3 inputs (refer to note 18), relate to price trends, material costs, discount rate, customer demand, and the long-term growth and foreign exchange rates. A number of benchmarks from independent industry and other economic publications were also used. Changes in assumptions and estimates after the assessment date may lead to an outcome where impairment charges would be required in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.

The annual goodwill impairment tests for 2011 and 2009 resulted in no impairment in any of the Company’s reporting units. Management concluded during the Company’s annual goodwill impairment test for 2010 that all of the Company’s goodwill within the EMEA reporting unit was not recoverable and recorded a $168,714 non-cash impairment charge during the fourth quarter 2010.

Other Assets Included in other assets are net capitalized computer software development costs of $51,117 and $55,575 as of December 31, 2011 and 2010, respectively. Amortization expense on capitalized software of $18,742, $17,315 and $16,768 was included in product cost of sales for 2011, 2010 and 2009, respectively. Other long-term assets also consist of patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred. Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to the lower of its fair value or its net book value.

For the years ended December 31, 2011, 2010 and 2009, the Company recorded other asset-related impairment charges within DNA continuing operations of $2,962, $7,135 and $2,500, respectively. The 2011 impairment charge related to a software intangible asset, the 2010 impairment charges related primarily to customer contract intangible assets and an other than temporary impairment of a cost-method investment and the 2009 impairment charge related to the tradename Firstline, Incorporated.

Investment in Affiliate Investment in the Company’s non-consolidated affiliate is accounted for under the equity method and consists of a 50 percent ownership in Shanghai Diebold King Safe Company, Ltd. The balance of this investment as of December 31, 2011 and 2010 was $11,461 and $12,118, respectively, and fluctuated based on equity earnings and dividends. Equity earnings from the non-consolidated affiliate are included in miscellaneous, net in the consolidated statements of operations and were $1,813, $2,982 and $2,456 for the years ended December 31, 2011, 2010 and 2009, respectively. The non-consolidated affiliate declared dividends of $2,470, $2,172 and $2,610 for the years ended December 31, 2011, 2010 and 2009, respectively.